The House of Lords decided that North Yorkshire council had contravened equal pay laws when it dismissed school meals staff and re-employed them on lower pay in order to defeat an outside tender.
Tens of thousands of women throughout Britain who have found themselves in similar circumstances will now be able to seek legal redress.
In 1991 the Northallerton-based council reduced the women's wages from pounds 3.40 to pounds 3 an hour, cut their holiday entitlement and abolished their sick pay scheme. After yesterday's judgment, the women are now due more than pounds 2m in back pay amounting to about pounds 1,500 to pounds 1,600 each.
The council reduced their pay despite its acceptance in 1988 of a job evaluation study which found that the women's work was of equal value to that of road sweepers, gardeners and refuse collectors who were overwhelmingly men.
The women's case, backed by public service union Unison, has followed a long and tortuous legal route beginning with a favourable judgment in 1992 at the Leeds industrial tribunal which was subsequently overturned by the Employment Appeal Tribunal. The union then took the case to the Appeal Court which agreed with the council that there had been no discrimination. The court decided that the inferior employment conditions were the genuine result of market forces.
Lord Slynn said the simple fact was that the women were paid less than men who performed work which was rated as equivalent. That constituted direct discrimination and could not be justified.
The law lord said that the women were unable to seek other work because their jobs fitted in with their family responsibilities. They were obliged therefore to accept the cut in wages. The fact that two men were employed in the same job did not detract from the case and simply meant that the men were underpaid compared with their male colleagues.
John Ransford, chief executive of the council, said the judgment would have "massive implications" for ratepayers in North Yorkshire as well as other authorities and private companies. It meant an extra pounds 1m in running costs for his council.
He said the council had been trying to retain the jobs.
Another test case has found that it is unlawful for a successful private tenderer to introduce inferior conditions for ex-council employees.
Rodney Bickerstaffe, associate general secretary of Unison, said yesterday's judgment was a victory for "the staff, the union and commonsense". He said the decision punched a hole in compulsory tendering by protecting the rights of low paid women workers.
n In a speech to a special TUC conference yesterday on the establishment of a statutory minimum wage, Mr Bickerstaffe made it clear that his union would press the Labour Party to commit itself to a minimum of pounds 4.15 an hour - based on half median male earnings.Reuse content